To keep its subscribers, Multichoice Nigeria, owners of DStv and GOtv, has slashed its subscription fees. The move, watchers say, makes business sense, writes ADEDEJI ADEMIGBUJI.
Difficult economic times require new strategies. With a squeeze on capital and credit, commodity and oil price weakness, coupled with the falling value of currencies, businesses are faced with the problem of taking tough decisions to stay afloat.
While staff retrenchment, budget constraints and the desire not to lose customers to competitors are concerns, the solutions available are not really as simple as they look. A possible price increase proposition, which could be a buffer, could hike widespread protest from consumers, the recent protest against energy tariff increase is a case study.
From banking, manufacturing, telecoms, to public service, there is an economic pressure forcing managers to think on moving their businesses forward, and taking a price slash and expressing desire to retain price despite that increased overheads make no one covet business managers.
However, subscribers of Multichoice, owners of DStv and GOtv, were shocked late last month when the firm announced a price reduction on some of its decoders and in addition thrilled sports lovers on its compact bouquet.
Football fans on Compact and Compact Plus were allowed access to watch EPL and La Liga on two new channels, SuperSport 11(DSTv Channel 231) and SuperSport 12(DSTv Channel 232) added to their platform.
Also, the company reduced its Explora, dish kit with one month compact subscription, initially sold at N71,000 reduced by more than N50,000 to N30,000 while the DStv Zapper decoder, dish kit plus one month compact subscription will now sell at N12,500 as against the previous price of N18,500.
This came as a shock to many DStv subscribers, who told The Nation that the history of price reduction by Multichoice can hardly be remembered, describing it as a bizarre.
For many of them, left for its cost of purchase and subscription, the pay TV remains the most preferred choice as a result of its engaging, creative and innovative contents, channels and audio-visual quality.
Some subscribers, who spoke with The Nation, said if other players could compete on those premises, other than affordable price which they offer against DStv prices, Multchoice brands could have gone into chasm.
But the Managing Director for MultiChoice Nigeria, John Ugbe, said the market has suffered many notches due to economic volatilty.
“It’s been a tough year for Multichoice Nigeria. Our markets have suffered as a result of commodity and oil price weakness, coupled with the huge devaluations of local currencies. Most of MultiChoice’s costs are incurred in dollars forcing us to pass through price increases in 2015. Nevertheless, we continue to take financial strain. But we are not alone! Our subscribers who are our biggest asset, are suffering. So, we are going to do our bit. We’ve decided to absorb some of the pains and not impose a price increase on any of our DStv bouquets. Barring any further external economic shocks, we do not anticipate a price increase in 2016,” he said.
Ugbe continued: “We want you to have a great in home viewing experience and the best local and international television entertainment. We started this journey last month when we launched two new SuperSport channels to bring the EPL, La Liga and the EURO 2016 tournament to DStv Compact subscribers and we are not stopping there.”
While its subscribers anticipate the usual April price increase, the pay TV published an advertorial on some national papers early in the week, insisting that subscribers should not anitipate any increment. “We are extremely pleased to announce that there will be no price increase on DStv subscriptions this April on any of the bouquets. Barring any further external economic shocks, we do not anticipate a price increase in 2016,” he said.
This move has, however, generated reaction from individual, corporate and viewing centres subscribers. Adesola Tahoeed, who uses Explora platform described the late February announcement as shocking.
Also, Mohammed Adamson, who runs a viewing centre, said he did not anticipate sustainabi-lity of the price slash and of the new channels to Compact bouquet until DStv later published further announcement in the papers during the week that subscribers should not anticipate any increase in April. “That is re-assuring that DStv shows care especially when most subscribers are facing economic challenges, drip in income. For now, DStv remains the leading brand,” he said.
However, an expert and CEO of High Impact International, a Kenya-Uganda-based content marketing firm, Mr. Yinka Agbe, said raising and lowering prices effectively involves careful attention to timing.
“It requires knowing how to affect your customers’ perception of the value inherent in what you are selling. It forces you to study and accurately predict reactions from your competitors,” he said.
Quoting a survey by Harris Interactive, Agbede said 52 per cent of customers believe the main reason of doing business with a company is because of outstanding service while 38 percent also cited lowest price as another number one reason.
Meanwhile, the General Manager, MultiChoice Nigeria, Martin Mabutho, said one of MultiChoice key priorities is to put subscribers’ needs at the heart of everything.
“Since these have been tough economic times for everyone, we realised that our subscribers could use some good news,” said the MultiChoice chief.
